08 September 2014

Sidley Shale Gas and Hydraulic Fracturing Report

Volume 3, No. 36


EPA Administrator outlines plan for hydraulic fracturing study. In a recent speech, Environmental Protection Agency (EPA) Administrator Gina McCarthy provided details on the agency’s ongoing study of the potential impacts of hydraulic fracturing on drinking water resources. Administrator McCarthy stated that the study would be consistent with the Administration’s support for unconventional oil and gas extraction within the context of its climate program and focus on best management practices that states and industry members could implement to protect drinking water resources. The study was designed to cover a number of issues related to hydraulic fracturing, including water acquisition, chemical mixing, well construction, wastewater disposal and seismicity. Administrator McCarthy stated the study is part of the agency’s overall efforts regarding hydraulic fracturing, which also include a methane strategy that EPA intends to release this fall.

Rail shipment of crude oil reaches all time high. The Association of American Railroads announced that rail shipments of crude oil reached an all-time high of 119,634 car loads in the second quarter or 2014. This represented an increase of more than 10,000 car loads in the first quarter and was more than double the amount oil shipped by rail in the second quarter of 2012. The shipment of oil by rail has been under scrutiny, with the Pipeline and Hazardous Materials Safety Administration proposing regulations to address concerns that have been raised over the volatility of crude oil from the Bakken shale region.

<lt;BR>Pennsylvania: DEP releases private wells data.
On August 28, the Pennsylvania Department of Environmental Protection (DEP) released comprehensive data on constituents found in private wells which the agency reports are due to natural gas development. The data identified constituents present in nearly 250 private wells since 2007. The data show significant improvement since 2010, with the number of allegedly impacted wells reduced nearly 50% from 2010 to 2013. DEP officials attribute this improvement to revised regulations with an increased emphasis on protecting water quality.

Nevada agency adopts hydraulic fracturing regulations. The Nevada Commission on Mineral Resources has approved regulations for oil and gas exploration using hydraulic fracturing as directed by the state legislature. Among other things, the regulations would require sampling of nearby water wells both before and after hydraulic fracturing operations. The regulations would also require pre-drilling disclosure of hydraulic fracturing chemicals and allow the agency to deny the use of certain high-risk chemicals. The regulations must be approved by a legislative committee on rulemaking before becoming effective.

Oklahoma: Governor announces council to evaluate seismic activity. Oklahoma Governor Mary Fallin announced the formation of a Coordinating Council on Seismic Activity which will provide a forum for interested stakeholders to share information related to seismic activity in Oklahoma. Headed by the Oklahoma Secretary of Energy and Environment, the council will be open to the state legislature, the Oklahoma Geologic Survey, research institutions, industry groups and environmental groups. The state, which has seen a significant increase in seismic activity in recent years, is in the process of developing a critically stressed fault map that will inform future regulation and permitting of injection wells related to hydraulic fracturing activities.

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